Low minimum wage a global worry, not just in U.S.

Andrew S. Ross

Published 4:16 pm, Saturday, December 7, 2013

Photo: Munir Uz Zaman, AFP/Getty Images

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Bangladeshi garment workers walk out from a factory in Gazipur, a garment manufacturing hub outside Dhaka in protest over poor wages and working conditions. Their minimum pay was raised to $67 a month.

Bangladeshi garment workers walk out from a factory in Gazipur, a garment manufacturing hub outside Dhaka in protest over poor wages and working conditions. Their minimum pay was raised to $67 a month.

Photo: Munir Uz Zaman, AFP/Getty Images

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Protesters rally outside a McDonald's restaurant in Oakland recently as part of a nationwide push to raise the federal minimum wage to $15 per hour.

Protesters rally outside a McDonald's restaurant in Oakland recently as part of a nationwide push to raise the federal minimum wage to $15 per hour.

Photo: Ben Margot, Associated Press

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WASHINGTON, DC - NOVEMBER 13: Representative George Miller (D-CA) speaks at the Strong Start for America's Children bill introduction at the Capitol Visitor's Center on November 13, 2013 in Washington, DC. (Photo by Larry French/Getty Images) less

WASHINGTON, DC - NOVEMBER 13: Representative George Miller (D-CA) speaks at the Strong Start for America's Children bill introduction at the Capitol Visitor's Center on November 13, 2013 in Washington, DC. ... more

Photo: Larry French, Getty Images

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Bangladeshi garment workers shout slogans during a protest demanding wage increases in Dhaka on November 4, 2013, in front a government office where a meeting is going on to decide a minimum wage for garment workers. Bangladesh unions have rejected a proposal by the manufacturers to raise salaries for the country's four million garment workers by 50 percent, amid worries over fresh crippling strikes in the key industry. The manufacturers proposed maximum wages of 4,500 taka (USD56.25) per month including food allowances for the workers during a meeting of the government Minimum Wage Board panel, which is up from USD38 fixed in November 2010. AFP PHOTO/ Munir uz ZAMANMUNIR UZ ZAMAN/AFP/Getty Images less

Bangladeshi garment workers shout slogans during a protest demanding wage increases in Dhaka on November 4, 2013, in front a government office where a meeting is going on to decide a minimum wage for garment ... more

Photo: Munir Uz Zaman, AFP/Getty Images

Low minimum wage a global worry, not just in U.S.

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Last week 3.5 million Bangladeshi garment workers got their minimum pay raised to $67 a month, an 80 percent increase. It was one of the Bangladeshi government's responses to April's collapse of the Rana Plaza factory building that killed 1,100 mostly female garment workers, prompting an international uproar and leading Western retailers to improve working conditions at their supplier factories there.

Concerns had been raised that increasing the minimum wage would result in a loss of jobs, and there have already been reports of layoffs. "It's almost impossible for the industry to sustain this level of staffing at the new wage level," said one Bangladeshi manufacturer last week.

Switch to the United States, where similar concerns are being raised as the call to raise the minimum wage here gets ever louder.

"As businesses struggle to recover from the economic recession, dramatic, mandatory wage increases would place yet another financial burden on business owners who are already feeling the pressures of a weak economy," says the National Restaurant Association, noting that the nation is already experiencing the lowest labor participation rate in 30 years.

Now, before we go any further, so there's no misunderstanding: The United States is not Bangladesh. Working conditions at McDonald's can in no way be compared to those of garment and other workers in Bangladesh. There are light years between the two.

But something is radically wrong in the richest country of the world when McDonald's has a "McResource" help line directing employees to government resources to help supplement their wages; when Walmart has food bins outside some of its stores so its "associates in need can enjoy Thanksgiving dinner"; and when one-third of the nation's bank tellers are on some form of taxpayer assistance, including food stamps and earned income tax credits, according to UC Berkeley Center for Labor Research and Education.

In the East Bay, where the minimum wage is $8 compared with the federal minimum of $7.25, Elida Munoz, a mother of two, works a combined 15-plus hours a day (9:15 a.m. to 4:15 p.m., 8 p.m. to 4:15 a.m.) at Jack-in-the-Box for $9.40 an hour, and KFC, where she's worked for 17 years, for $9 an hour.

Munoz, who participated in a fast-food worker demonstration outside a McDonald's in Oakland on Thursday, told The Chronicle's Joe Garofoli her 15-year-old daughter recently asked for a laptop and extra books for school. "But I had to tell her we have no money."

Citing studies by UC Berkeley's Labor Center and others on the correlation of minimum wage and public assistance, Ron Unz, a Silicon Valley entrepreneur and former Republican gubernatorial candidate, has floated a ballot initiative that would raise California's minimum wage further, to $12 by 2016.

A bill co-authored by Rep. George Miller, D-Martinez, would increase the federal minimum hourly wage from $7.25 to $10.10 over two years. While there is talk of it coming up in the Democrat-controlled Senate this year, its prospects, especially in the House, are doubtful, though a Gallup poll had 70 percent of Americans favoring an increase.

But moves are gaining traction on the state level. New Jersey voters approved raising the state's minimum wage to $8.25 last month. In Washington voters raised the minimum wage of over 6,000 employees at the Seattle-Tacoma International Airport to $15 an hour. Similar measures are on the ballot in several other states.

At the same time, there are glimmers of concern from corporate America about sub-livable wages and raging income inequality here.

"The system doesn't seem to be as fair or as inclusive. It doesn't seem to be helping broader society," Dominic Barton, global managing director at McKinsey, said in a recent issue of The Atlantic.

Back to Bangladesh. Last month, H&M, the Swedish apparel chain that sources from Bangladesh and Cambodia, said it would begin paying higher wholesale prices to manufacturers to enable them to pay workers a "living wage." Gap has long pushed for what the San Francisco retailer calls "wage reviews" for workers in its suppliers in Bangladesh, including in letters to the prime minister's office. "These letters were co-signed by other retailers as well as industry associations, highlighting the increased costs of living that workers were facing," said Laura Wilkinson, a Gap spokeswoman.

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